A PROJECT REPORT ON

“Study of flow of activities for

Policy underwriting

In private & public sector companies”

BY
DR. NEHA S. MAINDE
II yr. MHA &M
(nehamainde@yahoo.com)
Submitted in partial fulfillment of
Master’s Degree in Hospital Administration &
Management
Under the guidance of Mr. MURALI RAO for
Datta Meghe University of Medical Sciences, Nagpur
 CERTIFICATE

This Is to Certify That the Work on dissertation Entitled -

“STUDY OF FLOW OF ACTIVITIES FOR POLICY

UNDERWRITING IN

PRIVATE & PUBLIC SECTOR COMPANIES”

has been done by dr. Neha S. Mainde under my personal guidance and
supervision. All the investigations relating to this study were carried out by
the candidate herself. Her Approach To The Subject Is Sincere, Scientific,
And Analytical.
This work in partial fulfillment is recommended for the award of Post
Graduate Degree In Hospital Administration & Management from Datta
Meghe institute of Medical Sciences University (DMIMSU).

Mr. Murli Rao Mr. Vikas Mishra

Internal Guide Faculty
Centre Head DMIMSU
Wockhardt Hospital, Nagpur

2
 CERTIFICATE

This to certify that Dr. Neha S. Mainde has successfully completed her final
dissertation work for the partial fulfillment of master’s degree in Hospital
Administration & Management, here at branch office of Star Health & Allied
Insurance Company Ravi Nagar, Nagpur under my guidance.

She has done her dissertation work with full sincerity and dedication. The
information here is true to the best of my knowledge. I wish her all the success
and progress which she deserves in her future ventures.

Date :- Mr. Sanjay Makode

Place:- Nagpur Branch Manager,
Star Health and Allied Insurance Company,
Ravi Nagar, Nagpur

DECLARATION

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I hereby declare that this dissertation titled -

“STUDY OF FLOW OF ACTIVITIES FOR POLICY

UNDERWRITING IN

PRIVATE & PUBLIC SECTOR COMPANIES”

is the result of my own research work and that the same has not been
submitted by me or anyone else prior to this to any other examination of this
university or any other university.

Place:

Date: Dr. Neha Mainde

(Management Trainee, Nagpur)

ACKNOWLEDGEMENT

4
 I express my gratitude to Mr. Murali Rao, Center Head, Wockhardt Hospital, Nagpur
for his immense cooperation and guidance throughout my training.

Special thanks to Mr. Sanjay Makode, Branch Manager, Star Health & Allied
Insurance Company, my project coordinator for his support and guidance in the successful
completion of the Project assigned to me in the company and and Mr. Shrikant ane, New
India Assuarance Company,, for their support and co-operation.

Mr. Pankaj Vaishampayan, Marketing Department, wockhardt for his kind

support and cooperation. I would also like to thank all others who left their mark in the project
and help me in spite of their busy schedules and hectic work place.

I extremely grateful to Dr. Mrs. Gode (Director) and Mr. Vikas Mishra (Faculty)
for their best support in my learning throughout the course and project period.

Last but not the least I acknowledge the unwavering moral support of my parents, family
members and friends during my Dissertation.

Dr. Neha Mainde

(Management Trainee, Nagpur)

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 EXECUTIVE SUMMARY

Study Period :- 01 January to 12 march 2009.

Place of Study :- Star Health & Allied Insurance Company

As the nation is developing at a much higher speed than what was expected
nearly 2 – 3 decades ago, is bringing in sedentary life style giving rise to obesity related
disorders. So the demand for proper tertiary care hospitals is also going up. This brings with
them high amount of out-of pocket expenses.

In the light of present healthcare cost it is impossible to bear the cost out-of
pocket, which gives a major set back in terms of financial burden to the earning member of the
family. So insuring healthcare is the best possible way out.

Around a decade earlier healthcare portfolio was not given much importance.
Even the general insurance companies think it as a bleeding portfolio. But now people are
more aware of its benefits and are opting for it. As the awareness is going up malpractices are
also going up, cases of moral hazards are very common and hence there is as need of strict
medical & non medical underwriting guidelines which will be user friendly and compatible with
today’s fast moving world, which can be enhanced through web services and alerts.

My project mainly focuses on the comparison between underwriting guidelines of

different product lines in a private sector (only health insurance Company) and a public sector
company (general insurance company). Their SWOT analysis pertaining to the restricted
geographical area. Ways and means through which the workflow can be enhanced taking the
help of web services and alerts.

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Major Findings:-

1. There is a vast difference in underwriting guidelines of the two

companies.

2. There is much scope to improvise in the underwriting guidelines of both

the companies making them more users friendly.

3. The companies should be more vigilant regarding the disbursement of

claims as malpractices are very common in this sector.

4. More stress should be given on even distribution of risk amongst

population both in rural and urban area by effective campaigning and
creating awareness.

5. There is vast gap between the demand and need of the health insurance
in the society which should be supplied effectively.

6. People tend to avail health insurance in second half of their life. Younger
age group should be encouraged more and more to avail this facility
instead of a relatively aged group.

7. A proper health care system should be implemented nationwide by

taking examples of other nations.

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 TABLE OF CONTENTS

Background

Introduction to Insurance

• Health Care Insurance Scenario

• Star Health & Allied Insurance Company

Objectives of the study

Methodology

Limitations of Study

Review of literature

Key Findings during study in Star Health Insurance & Allied Company

Key Findings during study in New India Assurance Company

Key Findings during interviewing the selected policy holders

Some general Interpretation

SWOT Analysis

Recommendations & Suggestions

Conclusion

Annexure-
A- Questionnaire for selected policy holders
B- Brochures explaining policy benefits to customer
C- Questionnaire for sales managers

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 Introduction to Insurance

Definition:-

Insurance is defined as the equitable transfer of the risk of a loss, from one entity to
another, in exchange for a premium, and can be thought of as a guaranteed small loss to
prevent a large, possibly devastating loss.

Insurance appears simultaneously with the appearance of human society. We know of

two types of economies in human societies:

 Money Economies

With markets, money, financial instruments and so on........

 Non-Money Or Natural Economies

Without money, markets, financial instruments and so on........

The second type is a more ancient form than the first. In such an economy and
community, we can see insurance in the form of people helping each other. For example, if a
house burns down, the members of the community help build a new one. Should the same
thing happen to one's neighbor, the other neighbors must help Otherwise, neighbors will not
receive help in the future. This type of insurance has survived to the present day in some
countries where modern money economy with its financial instruments is not widespread.

For Example:- Countries in the territory of the former Soviet Union.

Turning to insurance in the modern sense (i.e., insurance in a modern money economy,
in which insurance is part of the financial sphere), early methods of transferring or distributing
risk were practiced by Chinese and Babylonian traders as long ago as the 3rd and 2nd
millennia BC, respectively. Chinese merchants travelling treacherous river rapids would
9
redistribute their wares across many vessels to limit the loss due to any single vessel's
capsizing. The Babylonians developed a system which was recorded in the famous Code of
Hammurabi, c. 1750 BC, and practiced by early Mediterranean sailing merchants. If a
merchant received a loan to fund his shipment, he would pay the lender an additional sum in
exchange for the lender's guarantee to cancel the loan should the shipment be stolen.

Achaemenian monarchs of Iran were the first to insure their people and made it official
by registering the insuring process in governmental notary offices.

The Greeks and Romans introduced the origins of health and life insurance in 600 AD
when they organized guilds called "benevolent societies" which cared for the families and paid
funeral expenses of members upon death.

Insurance as we know it today can be traced to the Great Fire of London, which in 1666
devoured 13,200 houses. In the aftermath of this disaster, Nicholas Barbon opened an office to
insure buildings. In 1680, he established England's first fire insurance company, "The Fire
Office," to insure brick and frame homes

Insurance, in law and economics, is a form of risk management primarily used to hedge
against the risk of a contingent loss. An Insurer is a company selling the insurance; an
Insured is the person or entity buying the insurance.

Premium:-

The insurance rate is a factor used to determine the amount to be charged for a certain
amount of insurance coverage, called the premium.

Indemnity:-

The technical definition of "indemnity" means to make whole again. There are two types of
insurance contracts;

1. an "indemnity" policy and

2. a "pay on behalf" or "on behalf of” policy.

The difference is significant on paper, but rarely material in practice. An "indemnity" policy will
never pay claims until the insured has paid out of pocket to some third party. Under the same

10
situation, a "pay on behalf" policy, the insurance carrier would pay the claim and the insured
both. Most modern liability insurance is written on the basis of "pay on behalf" language.

Insurers make money in two ways: (1) through Underwriting, the process by which insurers
select the risks to insure and decide how much in premiums to charge for accepting those risks
and (2) by investing the premiums they collect from insured parties.

Claims: - Finally, claims and loss handling is the materialized utility of insurance; it is the
actual "product" paid for, though one hopes it will never need to be used.

Commercially insurable risks typically share seven common

characteristics:-

 Limited risk of catastrophically large losses.

 Calculable Loss

 Affordable Premium

 Large Loss

 Accidental Loss

 Definite Loss

 A large number of homogeneous exposure units

Health Care Insurance

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Definition :-
The term health insurance is generally used to describe a form of insurance that pays
for medical expenses.

A health insurance policy is a contract between an insurance company and an

individual, By estimating the overall risk of healthcare expenses, a routine finance structure
(such as a monthly premium or annual tax) is developed, ensuring that money is available to
pay for the healthcare benefits specified in the insurance agreement. The type and amount of
health care costs that will be covered by the health plan are specified in advance, in the
member contract or Evidence of Coverage booklet.

The concept of health insurance was proposed in 1694 by Hugh the Elder Chamberlain
from the Peter Chamberlain family. Accident insurance was first offered in the United States by
the Franklin Health Assurance Company of Massachusetts. This firm, founded in 1850, offered
insurance against injuries arising from railroad and steamboat accidents. Before the
development of medical expense insurance, patients were expected to pay all other health
care costs out of their own pockets, under what is known as the fee-for-service business
model. During the middle to late 20th century, traditional disability insurance evolved into
modern health insurance programs.

Today, most comprehensive private health insurance programs cover the cost of
routine, preventive, and emergency health care procedures, and also most prescription drugs,
but this is not always the case.

The basic concept of health insurance is population solidarity. There are inherent risks
in a population but the population absorbs the cost of risks to an individual by spreading the
impact of incurred costs amongst the insured population. However, if the population is split into
insured and uninsured groups, or into selectively groups (as with private insurance with pre-
insurance selection either by the insurance company or the insured) the concept of population
solidarity breaks down. The insurance balances costs across a large, random sample of
individuals. For instance, an insurance company has a pool of 1000 randomly selected
subscribers, each paying Rs.100 per month. One person becomes very ill while the others stay
12
healthy, allowing the insurance company to use the money paid by the healthy people to pay
for the treatment costs of the sick person. However, when the pool is self-selecting rather than
random, as is the case with individuals seeking to purchase health insurance directly, adverse
selection is a greater concern. Insurance systems must then typically deal with two inherent
challenges: adverse selection and ex-post moral hazard.

Because of adverse selection, insurance companies employ medical underwriting, using

a patient's medical history to screen out those whose pre-existing medical conditions pose too
great a risk for the risk pool. Before buying health insurance, a person typically fills out a
comprehensive medical history form that asks whether the person smokes, how much the
person weighs, whether the person has been treated for any of a long list of diseases and so
on. In general, those who present large financial burdens are denied coverage or charged high
premiums to compensate.

Moral hazard occurs when an insurer and a consumer enter into a contract under
symmetric information, but one party takes action, not taken into account in the contract, which
changes the value of the insurance. A common example of moral hazard is third-party
payment—when the parties involved in making a decision are not responsible for bearing costs
arising from the decision. An example is where doctors and insured patients agree to extra
tests which may or may not be necessary. Doctors benefit by avoiding possible malpractice
suits, and patients benefit by gaining increased certainty of their medical condition. The cost of
these extra tests is borne by the insurance company, which may have had little say in the
decision. Co-payments, deductibles, and less generous insurance for services with more
elastic demand attempt to combat moral hazard, as they hold the consumer responsible.

Insurance companies like to compare buying health insurance after being diagnosed
with a serious medical condition like HCV to trying to buy fire insurance on a burning house.
That sounds really logical….except….most fire insurance policies are never used as most
houses don’t burn down. Everyone has medical problems, however, at one time or another.

To prevent a person from buying health insurance only when they need it, the insurance
industry uses a procedure called “medical underwriting.” Loosely translated into plain English,
it means “discriminating against anyone we feel may cost us money.” And this type of
discrimination against people with health problems is perfectly legal.

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The French model of health insurance has been ranked by the World Health Organization as
the best in the world, because it permits a high quality of care and nearly total patient freedom.
. It was a compromise between Gaullist and Communist representatives in the French
parliament. The Conservative Gaullists were opposed to a state-run healthcare system, while
the Communists were supportive of a complete nationalization of health care along a British
Beverage model. The resulting programme was profession-based. All people working were
required to pay a portion of their income to a health insurance fund, which mutualised the risk
of illness, and which reimbursed medical expenses at varying rates. Children and spouses of
insured people were eligible for benefits, as well. Each fund was free to manage its own
budget and reimburse medical expenses at the rate it saw fit.

Health Care Insurance Scenario In India

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 The health care system in India is characterized by multiple systems of medicine, mixed
ownership patterns and different kinds of delivery structures. During the last 50 years India has
developed a large government health infrastructure with more than 150 medical colleges, 450
district hospitals, 3000 Community Health Centers, 20,000 Primary Health Care centers and
130,000 Sub-Health Centers. On top of this there are large number of private and NGO health
facilities and practitioners scatters though out the country. Over the past 50 years India has
made considerable progress in improving its health status.

Public sector ownership is divided between central and state governments, municipal
and Panchayat local governments. Public health facilities include teaching hospitals,
secondary level hospitals, first-level referral hospitals (CHCs or rural hospitals), dispensaries;
primary health centres (PHCs), sub-centres, and health posts. Also included are public
facilities for selected occupational groups like organized work force (ESI), defense,
government employees (CGHS), railways, post and telegraph and mines among others.

The private sector (for profit and not for profit) is the dominant sector with 50 per cent of
people seeking indoor care and around 60 to 70 per cent of those seeking ambulatory care (or
outpatient care) from private health facilities.

India spends about 6% of GDP on health expenditure. Private health care expenditure
is 75% or 4.25% of GDP and most of the rest (1.75%) is government funding. At present, the
insurance coverage is negligible. Most of the public funding is for preventive, promotive and
primary care programes while private expenditure is largely for curative care. Over the period
the private health care expenditure has grown at the rate of 12.84% per annum and for each
one percent increase in per capital income the private health care expenditure has increased
by 1.47%. Number of private doctors and private clinical facilities are also expanding
exponentially.

Indian health financing scene raises number of challenges, which are:

1) Increasing health care costs,

15
 2) High financial burden on poor eroding their incomes,
3) Increasing burden of new diseases and health risks and
4) Neglect of preventive and primary care and public health
functions due to under funding of the government health
care.

Around 24% of all people hospitalized in India in a single year fall below the poverty line
due to hospitalization (World Bank, 2002). An analysis of financing of hospitalization shows
that large proportion of people; especially those in the bottom fourincome quintiles borrow
money or sell assets to pay for hospitalization (World Bank, 2002).

Given the above scenario exploring health-financing options becomes critical. In light of
the fiscal crisis facing the government at both central and state levels, in the form of shrinking
public health budgets, escalating health care costs coupled with demand for health-care
services, and lack of easy access of people from the low-income group to quality health care,
health insurance is emerging as an alternative mechanism for financing of health care.

Health insurance is very well established in many countries. As global insurance

premiums grew by or 5% in real terms to reach $3.7 trillion due to improved profitability and a
benign economic environment characterized by solid economic growth, moderate inflation and
strong equity markets. Advanced economies account for the bulk of global insurance. The top
four countries accounted for nearly two-thirds of premiums in 2006. The U.S. and Japan alone
accounted for 43% of world insurance, much higher than their 7% share of the global
population. Emerging markets accounted for over 85% of the world’s population but generated
only around 10% of premiums. But in India the health insurance market is very limited covering
about 10% of the total population. It is a new concept except for the organized sector
employees. In India only about 2 per cent of total health expenditure is funded by public/social
health insurance while 18 per cent is funded by government budget. In many other low and
middle income countries contribution of social health insurance is much higher.

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 Table 1

Percentage of total health expenditure funded

through public/social

insurance and direct government revenue

Social Health Government
COUNTRY
Insurance Budget
Algeria 37 % 36%
Bolivia 20 % 33 %
China 31 % 13 %
Korea 23 % 10 %
Vietnam 2% 20 %
India 2% 18 %

It is estimated that the Indian health care industry is now worth of Rs. 96,000 crore and
expected to surge by 10,000 crore annually. The share of insurance market in above figure is
insignificant. General Insurance Corporation (GIC) and its four subsidiary companies and Life
Insurance Corporation (LIC) of India have various health insurance products. These are
Ashadeep Plan II and Jeevan Asha Plan II by Life Insurance Corporation of India and various
policies by General Insurance Corporation of India as under: Personal Accident Policy, Jan
Arogya Policy, Raj Rajeshwari Policy, Mediclaim Policy, Overseas Mediclaim Policy, Cancer
Insurance Policy, Bhavishya Arogya Policy and Dreaded Disease Policy (Srivastava 1999) Etc.

17
 Of the various schemes offered, Mediclaim is the main product of the GIC. The Medical
Insurance Scheme or Mediclaim was introduced in November 1986 and it covers individuals
and groups with persons aged 5 – 80 yrs. Children (3 months – 5 yrs) are covered with their
parents. This scheme provides for reimbursement of medical expenses (now offers cashless
scheme) by an individual towards hospitalization and domiciliary hospitalization as per the sum
insured. There are exclusions and pre-existing disease clauses. Premiums are calculated
based on age and the sum insured, which in turn varies from Rs 15 000 to Rs 5 00 000.

Star Health & Allied Insurance Company

Star Health and Allied Insurance Co. is a joint venture between Oman Insurance
Company, Mr. Syed Mohamed Salahuddin,Mr. Essa Abdullah Al Ghurair,leading Indian
industrialists and business houses. It is thier endeavor to provide dedicated, affordable and
quality health insurance that preserves and values human lives. This company aim to be the
most favored brand in the health insurance segment. We offer a wide range of health insurance
services and related products at affordable prices. Our prime objective is to offer services in the
health segment that enable you to manage stressful situations.

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 Star Health and Allied Insurance Company Limited (Star Health) has a capital
base of Rs.108 crores, more than what is adequate to form a General Insurance Company.
However, Star Health has chosen to be in the field of Health and was the First stand-alone
Health Insurance Company in India and deals in Personal Accident, Mediclaim and Overseas
Travel Insurance.

Mr. V. Jagannathan, Chairman cum Managing Director. He is a doyen of the

Insurance industry with over 40 years of experience in Insurance. He has held various positions
of authority, including that of CMD of one of India's largest Public Sector insurance companies.

BOARD OF DIRECTORS

Mr. Syed Mohamed Salahuddin - Chairman - Emeritus. Managing Director of ETA ASCON
and ETA STAR group of Companies in Dubai, U.A.E

Mr. Essa Abdullah Al Ghurair was educated in San Diego, USA. The Al Ghurair family has
business interests in Banking, Food & Beverages and Real estates.

Dr. M. Y. Khan is currently the Chairman of the Banking and Advisory council of YES Bank
Ltd.

Mr. D. R. Kaarthikeyan is currently a visiting professor in many prestigious institutions.

Mr. V.P. Nagarajan is the Executive Director of ETA ASCON and ETA STAR group of
Companies headquartered in Dubai, UAE.

Mr. Mohammed Hassan is a prominent educationalist and industrialist and has wide
knowledge in the respective fields for over three decades.

Star Health & Allied Insurance Company :-

• Is the first stand alone health insurance company in India. It

specializes in Health Insurance, provides quality service at the
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 best rates, and commits itself to the service of the insured.

• Offers hassle free cashless settlement to the insured. There is no

Third Party Administrator involved, which means better service, in
shorter time and no hassles... at all!

• Provides a No Claim Discount - one that has never been offered

before in the country.

• Has a round-the-clock GP service, which provides counseling and

advice . When necessary the insured will be guided to the
Company's large network of doctors in different localities.

• Provides periodic health check ups for the clients. Has a range of
policies suited to every age group, different health aspects and
concerns.

# And last but not the least, STAR HEALTH is first and foremost, a
dedicated insurer who cares for your health...in every way!

Exclusive Features :

• Cashless service without TPA intervention the USP of the Company

• Direct tie-up with hospitals on all India basis

• 24 hours General Practitioner's advice and medical counseling

• 24x7 in-house Call Center

• Toll free telephone assistance

• Complete knowledge backed website to offer medical information, including health tips.

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21
 Our Vision
Protecting Health Promoting Health

Our Mission
Ultimate Customer Satisfaction
Trust and Ethics
We believe honesty and integrity

are essential to our success.

Conducive work environment
To create an environment that is conducive
to Customer Satisfaction, Innovation and
Belongingness.
Commitment
We are committed to become a STAR in
health and related insurance.

Introduction to study
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This study focus on understanding the underwriting Guidelines / Procedures practiced in two
different companies from two different sectors mainly focusing on Private Sector Company

1. Star Health & Allied Insurance Company Ltd.(Private Sector Company)

2. New India Assurance Company (Public Sector Company)

The study will have following types of insurance policies :-

1. Mediclaim Policy

2. Accidental Insurance

3. Overseas Mediclaim

Objectives

1. To study the underwriting Guidelines/procedure of selected policies which are being

practiced in the insurance company.

2. To calculate & suggest possible ways to decrease the turn around time in the
underwriting procedure for each policy.

3. To do a SWOT analysis for the purpose of comparison.

4. To study the existing web services & alerts for the purpose of policy underwriting & post
policy services.

FLOW CHART FOR UNDERWRITTING

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 THE MEDICLAIM POLICY
Sales Manager /Agent

Submits the Proposal to Underwriter

Underwriter checks all the Mandatory fields filled in

the Proposal Form

Properly filled forms are Improperly filled forms

preceded for underwriting are sent back for
upgradation

Proposals below50 yrs. Proposals above 50

Of age are Proceeded yrs. Of age are sent for
for underwriting Pre-medical
examination

According to the proposal

with/without loading on premium
policy is underwritten and issued
to the proposer.

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25
 UNDERWRITTING

The most complicated aspect of the insurance business is the underwriting of policies. There
are 2 different methods of application that anyone looking for personal health insurance must
be aware of. These are

1. Full Medical Underwriting (FMU)

2. Moratorium (MOR).

Underwriting in relation to health insurance basically involves the disclosure of certain

information to an insurance company which they can then access to decide when pre-existing
conditions should be excluded from cover. With some policies one will be required to complete
an application form that details full medical history where as with a moratorium policy your
medical history will only become an issue at the point you need to make a claim.

Policies requiring a medical history declaration, or full medical underwriting, require the
applicant to complete an application form that details the full medical history for each applicant.
Private health insurance companies consult an applicant's GP in order to verify conditions or to
investigate an applicant's medical history further. Having submitted medical history a decision
will be made by the health insurance company as to whether or not they will cover any
previous medical conditions.

The rules surrounding ‘Duty of Disclosure' when applying for personal health insurance
are quite strict. It is one’s duty to disclose any fact or circumstance about your health that is
known to you at your time of application. The main reason behind this disclosure is to identify if
you have any pre-existing conditions that will be excluded from treatment from your health
insurance policy.

Most health insurance providers will not pay benefits for any conditions that you have
been treated for in the past or have arranged treatment for prior to taking out your medical
insurance policy. This also includes any chronic conditions that have been diagnosed before
the health insurance policy was granted. If you fail to disclose details of any illness at the start
of your health insurance application then you could be denied a future claim or your personal
health insurance could be deemed invalid.
26
 Some health insurance providers may agree to cover pre-existing conditions in
exchange for additional premiums, but this will depend entirely upon the condition in question
and its severity, how long you have had it and what treatment you have had or are still having
for that condition. Again, each health insurance company is different with different policies so
make sure you always do your homework with regards to what is and what is not included.

If you opt for a policy that requires full medical underwriting then all your medical history
will be available to your insurers up front enabling them to make an informed judgement before
confirming your policy. A moratorium policy is however a little bit different as this type of
application process does not require disclosure of medical history when joining. Instead any
illness is assessed at the point of making a claim.

With moratorium you do not need to fill in a health questionnaire. Instead, pre-existing
conditions for which you (and any dependant included in your application) have received
treatment and/or medication, or asked advice on, or had symptoms of (whether or not
diagnosed), during the four years immediately before your private health insurance cover
started will automatically be excluded from cover.

However, if you do not have any symptoms, treatment, medication, or advice for those
pre-existing conditions, and any directly related conditions, for two continuous years after your
policy starts, then insurers may reinstate cover for those conditions.

When choosing a personal health insurance provider it is vital that you understand the
differences between policies and which one is best suited. With any insurance company
though it is always better to be honest from the outset to avoid any disappointment or hefty
medical bills further down the line. With Full Medical Underwriting the boundaries are perhaps
clearer as everything will be documented from the outset and assessed by your insurer before
the policy is approved leaving you with a clear understanding of exactly what your personal
health insurance covers you for. Using a wide assortment of data, insurers predict the
likelihood that a claim will be made against their policies and price products accordingly. To
this end, insurers use actuarial science to quantify the risks they are willing to assume and the
premium they will charge to assume them. Data is analyzed to fairly accurately project the rate
of future claims based on a given risk. Actuarial science uses statistics and probability to
analyze the risks associated with the range of perils covered, and these scientific principles are
used to determine an insurer's overall exposure. Upon termination of a given policy, the

27
amount of premium collected and the investment gains thereon minus the amount paid out in
claims is the insurer's underwriting profit on that policy. Of course, from the insurer's
perspective, some policies are winners (i.e., the insurer pays out less in claims and expenses
than it receives in premiums and investment income) and some are losers (i.e., the insurer
pays out more in claims and expenses than it receives in premiums and investment income).

• The business model can be reduced to a simple equation:

• Profit = earned premium + investment income - incurred loss - underwriting expenses.

• Insurers make money in two ways:

• Through underwriting, the process by which insurers select the risks to insure and
decide how much in premiums to charge for accepting those risks.
• By investing the premiums they collect from insured parties.

Insurance companies also earn investment profits on “float”. “Float” or available

reserve is the amount of money, at hand at any given moment, that an insurer has collected in
insurance premiums but has not been paid out in claims. Insurers start investing insurance
premiums as soon as they are collected and continue to earn interest on them until claims are
paid out.

Some insurance industry insiders, most notably Hank Greenberg, do not believe
that it is forever possible to sustain a profit from float without an underwriting profit as well, but
this opinion is not universally held. Naturally, the “float” method is difficult to carry out in an
economically depressed period. Bear markets do cause insurers to shift away from
investments and to toughen up their underwriting standards. So a poor economy generally
means high insurance premiums. This tendency to swing between profitable and unprofitable
periods over time is commonly known as the "underwriting" or “insurance cycle”

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 Medial Underwriting:-

On receiving an application from an individual for health insurance, the

insurance company carefully scrutinizes the applicant's medical history and other factors to
decide whether to offer coverage or not and if yes, then on what rate and on what conditions.
Each insurance company develops its own underwriting guidelines to outline the
characteristics the company considers desirable and those that make an applicant ineligible for
coverage. Health insurers avoid individuals or groups that they think may be likely to make
claims, either because of poor health or because the person or company is financially
unstable. Insurance companies use the term "adverse selection" to describe the tendency for
only those who will benefit from insurance to buy it. Specifically when talking about health
insurance, unhealthy people are more likely to purchase health insurance because they
anticipate large medical bills. On the other side, people who consider themselves to be
reasonably healthy may decide that medical insurance is an unnecessary expense; if they see
the doctor once a year and it costs Rs.250/-, that's much better than making monthly insurance
payments of Rs.40/- (example figures).

Because of adverse selection, insurance companies employ medical underwriting,

using a patient's medical history to screen out those whose pre-existing medical conditions
pose too great a risk for the risk pool. Before buying health insurance, a person typically fills

29
out a comprehensive medical history form that asks whether the person smokes, how much
the person weighs, whether the person has been treated for any of a long list of diseases and
so on. One large industry survey found that roughly 13 percent of applicants for
comprehensive, individually purchased health insurance who went through the medical
underwriting in 2004 were denied coverage. Declination rates increased significantly with age,
rising from 5 percent for individuals 18 and under to just under a third for individuals aged 60 to
64. Among those who were offered coverage, the study found that 76% received offers at
standard premium rates, and 22% were offered higher rates.

The premium structure is not designed for the extra risk assumed by insuring persons
who drink intoxicants to excess, who are victims of drug habits, who are reckless in their
manner of living or choice of associates or who have questionable reputations. Such persons
are not eligible for health insurance." All companies selling individual major medical insurance
policies examine the medical history of every applicant, using questions on the application,
follow-up phone calls, Medical Information Bureau reports, paramedical exams, and blood and
urine samples. Medical underwriting manuals are extensive and include detailed discussions of
known illness for each of the body's systems (circulatory, nervous, reproductive, etc.)

Moral hazard occurs when an insurer and a consumer enter into a contract under
symmetric information, but one party takes action, not taken into account in the contract, which
changes the value of the insurance. A common example of moral hazard is third-party
payment—when the parties involved in making a decision are not responsible for bearing costs
arising from the decision. An example is where doctors and insured patients agree to extra
tests which may or may not be necessary. Doctors benefit by avoiding possible malpractice
suits, and patients benefit by gaining increased certainty of their medical condition. The cost of
these extra tests is borne by the insurance company, which may have had little say in the
decision. Co-payments, deductibles, and less generous insurance for services with more
elastic demand attempt to combat moral hazard, as they hold the consumer responsible.

Underwriting is a way of determining the insurability of the client by reviewing his/her

medical and financial details using various risk classification models. This practice can be
dated back to 1800 B.C, when undertaking risk, or underwriting risk, of ships with goods was
done. From those days, underwriting has evolved greatly and is presently categorized into life
and non-life underwriting, both including financial underwriting. Life underwriting can be further
30
divided technically into medical and non-medical underwriting.

Here are a few tips for prudent medical underwriting:

1. Use your analytical mind - Ask, “Does it make sense”

Always ask yourself whether the data given makes sense. In most of the cases the data
presented can be manipulated or it can be false positives. For example, a client can take a
hypoglycemic drug and go for a fasting blood glucose test or the value of nine given can be
HbA1, when a HbA1c test was to be performed.

2. Read between the lines

Analyze what is not given in the data provided or find the potential risks the medical reports
point to. For example, a 44-year-old female undergoing tooth extraction was also asked to
undergo an electrocardiogram and fasting blood sugar test. This data created a doubt and
when further investigated revealed diabetes mellitus.

3. Study medical history and genetic susceptibility

Carefully analyze the medical history as it can give you a lot of information about the client’s
current health status and possible endothelial damage, which must have occurred in their
body. For example, in the case of diabetes, hypertension along with the date of diagnosis can
provide a clear idea on the risks involved. Also some disorders are genetically manifested, for
example arthritis, thallassemia, diabetes, arthritis and obesity to name a few. Hence
understanding the medical history of the client and his first line relatives can provide
substantial data for classifying the risk to him.

4. Do not look from a clinical point of view

Remember insurance medicine is different from clinical medicine. You as medical underwriter
are not required to identify the root cause of the disease, but to identify the pathology and
analyze how much risk it presents to the life of the client and also within how much time the
client is going to suffer from that expected disease.
31
5. Use probability principles
Use probability principles to evaluate the chances of death or susceptibility to critical illnesses
covered by the health insurance product proposed within that span of the coverage by the
company.

6. Do not think long term

A medical underwriter should not think from a long-term point of view. Remember you should
only be interested up to the extent of the duration of the plan proposed. In addition, you need
to evaluate if the risk coverage money (premium) is recovered within the first few years of the
plan. Then you should evaluate the risk and underwrite, taking into consideration only that
duration of time.

7. Correlate all findings

Human body mechanisms are complex and interrelated processes. Try to find the correlation
between the different pathologies and sum them up to find the total risk presented by the
client. For example, a person with diabetes mellitus and smoking presents a higher risk than
that presented by the person with only diabetes mellitus.

8. Apply Cost Benefit analysis

A medical underwriter is also required to have an understanding of financial terms like cost
benefit analysis and use them prudently to evaluate the risk.

Key Findings in Star Health & Allied

Insurance Company Ltd

It is the first stand alone health insurance company in India. It specializes in Health
Insurance, provides quality service at the best rates, and commits itself to the service of the
insured.The Company is led by a group of leading industrialists and business houses in the
subcontinent.
32
 Oman Insurance Company is one of the leading Insurance Companies in the Middle
East. Mr. Essa Abdullah Al Ghurair hails from the prominent Al Ghurair family in the U.A.E.
With a net worth of USD 3.7 billion, the family has been ranked as one of the world's richest by
Forbes magazine...

The company has it’s Head Office in Chennai, Corporate Office in Mumbai &
Regional Office in Pune from last three years. Looking at the potential of vidarbha region the
company started its branch office in nagpur in october 2008.

The organisational structure for this branch is as follows:

Branch Manager

PolicyUnderwrite Medical
Officer
r

Sales
Variable Sales
Managers Managers

Advisor Advisors
s

The company has very strong financial backup & very good leadership which two are
the most important factors for any company to become successful. The company has recorded
itself as the fastest growing company with 400% of growth rate.

Looking at the indian scenario of Health insurance, which remained highly

underdeveloped and a less significant segment of the product portfolios of the nationalized
insurance companies in India, There was need of such type of company dealing only in health

33
insurance. Therefore there is overwhelming response from the consumers. Only in nagpur
from last 3 – 4 months over 400 policies are sold which comes around 4 – 5 policies per day.

Here comes the role of an underwriter as Health sector policy formulation, assessment
and implementation is an extremely complex task especially in a changing epidemiological,
institutional, technological, and political scenario. Further, given the institutional complexity of
our health sector programmes and the pluralistic character of health care providers.

Though policy underwriting is done in the branch office for those not requiring medical
examination as they are below 50 years of age, those proposers who are above 50 years of
age, their medical underwriting is done at regional office pune.

The work load here is though not much as the company is in its cradle phase still the
underwriter confirms the policy underwriting in minimum time which varies from half hour to 4
hours for policies not requiring medical underwriting, & those requiring medical underwriting
may vary from 24 hours to 15 days. The major factor here of concern is delay from the
proposer in submitting medical documents. If time phase is considered from the submission of
medical reports to the issuing of policy it comes to around 12 hours to 48 hours.

UNDERWRITTING GUIDELINES FOR VARIOUS

PRODUCTS

1. Medi-Classic Individual

34
 2. Family Health Optima
3. Senior Citizens’ Red Carpet
4. Accident Care
5. Overseas Health Insurance

1. Medi-Classic Individual :-
• Medi Classic Insurance from Star Health is a policy that aims to provide reimbursement
of hospitalisation expenses incurred as a result of illness/disease/sickness and/or
accidental injuries.
• Any persons aged between 5 months and 80 years, residing in India,can take this
insurance.
• Premium Range between :-

Sum
5 months - 35 56 - 65 66 - 70 71 - 75 76 - 80
Insured 36 - 45 yrs 46 - 55 yrs
yrs yrs yrs yrs yrs
(in Rs)

50000 575 700 1320 NA NA NA NA

35
100000 1200 1350 2447 3000 4547 4872 6029

150000 1800 2000 3400 4200 6717 7284 9284

200000 2350 2600 4583 5300 8768 9574 12420

250000 2800 3150 5548 7200 10696 11744 15433

300000 3300 3650 6170 8200 12625 13914 18449

350000 3750 4150 7408 10196 14434 15964 21341

400000 4200 4500 8700 11451 16242 18015 24236

500000 4900 5400 10700 13958 19859 22113 30023

• Hospital Cash:Provides for payment of Rs.500 for each completed day of

hospitalisation. Premium ranging from Rs.200 to Rs. 350 per person, depending upon
the age.
• Patient Care:Available for persons above 65 years. It pays for the attendant charges
after discharge from the hospital @ Rs 400 per day to a maximum of 5 days per
hospitalization. Premium Rs 300 per person.
• New Born Baby cover:Available with Family package plan and provides for your new-
born from birth up to the expiry of the policy period. The sum insured is restricted to
10% of the sum insured in respect of the mother. Premium 10% of policy premium.
• Hospitalisation Cover : In-patient hospitalisation expenses for a minimum of 24
hours.Includes room rent and boarding @2% of sum insured,subject to a maximum of
Rs.4000/- per day.

36
• Nursing expenses.
• Surgeon's fees,Consultant's fees,Anaesthetist's and Specialist's fees.
• Cost of medicines and drugs.
• Emergency ambulance charges for transporting the insured patient to the hospital upto
a sum of Rs 750/- per hospitalisation and overall limit of Rs 1500/- per policy period.
• Pre-hospitalisation medical expenses upto 30 days prior to date of admission.
• Post-hospitalization - a lumpsum calculated at 7% of the hospitalisation(excluding room
charges)subject to a maximum of Rs.5000 is payable
• Non-allopathic Treatments upto Rs.25,000/- per occurence, subject to a maximum of
25% of sum insured per policy period.
• Hospital Cash:Provides for payment of Rs.500 for each completed day of
hospitalisation. Premium ranging from Rs.200 to Rs. 350 per person, depending upon
the age.
• Patient Care:Available for persons above 65 years. It pays for the attendant charges
after discharge from the hospital @ Rs 400 per day to a maximum of 5 days per
hospitalization. Premium Rs 300 per person.
• New Born Baby cover:Available with Family package plan and provides for your new-
born from birth up to the expiry of the policy period. The sum insured is restricted to
10% of the sum insured in respect of the mother. Premium 10% of policy premium.
• Premium paid by cheque or credit card for this insurance is eligible for relief under
Sectin 80D of the Income Tax Act.

Exclusions :-

• Expenses for the treatment of any illness/disease/condition,which is pre-existing

• Treatment of illness/disease/sickness contracted by the insured person during the first
30 days from the commencement date of this policy
• First Two Years Exclusions: Cataract,Hysterectomy for Menorrhagia or
Fibromyoma,Replacement surgery for knee and/or joint(other than caused by an
accident),Prolapse of intervertibral disc (other than caused by accident), Varicose Veins
and Varicose Ulcers

37
• FirstYearExclusions:Benign Prostate Hypertrophy,Hernia,Hydrocele,Fistula in
anus,Piles,Sinusitis and related disorders,Congenital internal disease/defect,removal of
gallstones and renal stone
• Naturopathy treatment
• Expenses which are purely diagnostic in nature with no positive existence of any
disease
• Treatment of Cogential external disease/defects/anomalies
• Expenses which are mainly cosmetic in nature

2. Family Health Optima :-

• Family Health Optima from Star Health is a health insurance plan that gives protection
for the entire family on the payment of a single premium under a single sum insured.
The sum insured floats among the family members insured. It’s just one more way to
tighten the family bonds.

• Any person aged between 5 months and 60 years residing in India can take this
insurance

• A: Adult C: Children upto 25 yrs. NA: Not Available

38
 Sum Insured : Rs. 1,00,000

5 Months - 45 Yrs 46 Yrs- 55 Yrs 56 Yrs- 60 Yrs

2A 1765 NA NA

1A + 1C 1515 NA NA

1A + 2C 1640 NA NA

1A + 3C 1785 NA NA

2A + 1C 1890 NA NA

2A + 2C 2025 NA NA

2A + 3C 2165 NA NA

Sum Insured : Rs. 2,00,000

5 Months - 35 56 Yrs- 60
36 Yrs- 45 Yrs 46 Yrs- 55 Yrs
Yrs Yrs

2A 2890 3140 5535 6400

1A + 1C 2715 3005 5265 6120

1A + 2C 2835 3075 5410 6225

1A + 3C 3085 3415 5715 6645

2A + 1C 3295 3555 5925 6965

2A + 2C 3455 3675 6450 7360

2A + 3C 3625 4060 6795 7820

39
• Age of the oldest family member covered should be taken for premium calculation
Service tax extra

• Hospitalization Cover: Protects the insured person for in-patient hospitalization

expenses for a minimum of 24 hours. These expenses include room and boarding
charges as per policy conditions

• Nursing expenses
• Surgeon's fees, Consultant’s fees, Anesthetist’s and Specialist's fees
• Cost of medicines and drugs
• Emergency ambulance charges for transporting the insured patient to the hospital upto
a sum of Rs.750/- per hospitalization and overall limit of Rs.1500/- per policy period.
• Single Sum Insured
• Coverage for entire family
• Single Premium
• Considerable saving in premium as the family is covered under one policy
• Pre-hospitalization medical expenses upto 30 days prior to the date of admission
• Post-hospitalization calculated at 7% of the hospitalization expenses (excluding room
charges),subject to a maximum of Rs.5000 is payable.
• Proposer, spouse, dependent children upto 25 years those who are economically
dependent on their parents.
• A discount of 10% on Premium is allowed on renewal of the policy if there is no claim in
the immediately preceding year of the policy. This discount is not cumulative.
• Payment by cheque for this insurance is eligible for relief under Section 80D of the
Income Tax Act.

40
Exclusions:-

• Expenses for the treatment of any illness/ disease/condition which is pre-existing

• Treatment of illness/disease/sickness contracted by the insured person during the first
30 days from the commencement date of the policy
• First Two Years Exclusions:Cataract,Hysterectomy for Menorrhagia or
Fibromyoma,Replacement surgery for knee and/or joint (other than caused by an
accident),Prolepses of intervertebral disc(other than caused by accident),varicose veins
and varicose ulcers
• First Year Exclusions:Benign Prostate Hypertrophy,Hernia,Hydrocele,Fistula in
anus,Piles,Sinusitis and related disorders,congenital internal disease/defects, removal
of gallstones and renal stone
• Naturopathy treatment
• Expenses which are purely diagnostic in nature with no positive existence of any
disease
• Expenses incurred for non-allopathic treatment
• Treatment of external Congential disease/defects/anomalies
• Expenses which are mainly cosmetic in nature

41
 3. Senior Citizens’ Red Carpet :-

Turning sixty is a major milestone and for people,a time to start being more careful
about their health.It is a matter of concern that insurance policies are hardly available to
address this critical requirement.STAR Health is proud to introduce India's first health
insurance policy aimed specifically at senior citizens.It provides cover for anyone over
the age of 60 and permits entry right up to the age of 69 with continuing cover after that.
It is our way of caring for a generation that has done so much to build the country.

• For people aged between 60 and 69 years

• Guaranteed renewals beyond 69 years
• No pre-insurance medical test required
• Treatment at network hospitals only
• All pre-existing diseases are covered from first year,except those for which treatment or
advice was recommended by or received during the immediately preceding 12 months
from the date of proposal
• Disease for which treatment or advice was recommended by or received during the
immediately preceding 12 months from the date of proposal will be covered from
second year onwards

Sum Insured Premium

100000 5000
200000 9500

42
 Disease Sum Insured Limit of company’s
Liability
Cerebro Vascular 100000 75000
Accident / Cardio
Vasular Disease 200000 150000

Renal 100000 75000

Complications
200000 150000
All Other major 100000 60000
Surgeries
200000 120000

Policy Premium – Including service tax

• Hospitalization Cover: In-patient hospitalization expenses for a minimum of 24

hours.Includes room rent and boarding @1% of sum
• ICU expenses per day @ 2% of sum insured
• Nursing expenses
• Surgeon's fees,consultant's fees,Anesthetist's and specialist's fees,per illness @ 25% of
sum insured
• Cost of blood,oxygen,pacemaker
• Cost of drugs and diagnostic tests @ 50% of sum insured per hospitalization
• Treatment for Cardiovascular Diseases / Cerebrovascular Accident/Cancer and
breakage of Bones : upto Rs.75,000/- where the sum insured is Rs.1,00,000/- and upto
Rs.1,50,000/- where the sum insured is Rs.2,00,000/-
• Cataract (both eyes included), up to Rs.15,000/-
• Renal Complications : upto Rs.75,000/- where the sum insured is Rs.1,00,000/- and
upto Rs.1,50,000/- where the sum insured is Rs.2,00,000/-
• All other Major Surgeries : upto Rs.60,000/- where the sum insured is Rs.1,00,000/- and
upto Rs.1,20,000/- where the sum insured is Rs.2,00,000/-

43
 • Emergency Ambulance Charges for transporting thhe Insured Person to the Hospital
@Rs.600/- per Hospitalisation and Rs.1200/- per Policy period

• Post-hospitalization - a lumpsum calculated at 7% of the hospitalization

expenses(excluding room charges),subject to a maximum of Rs 5,00o is payable.

• A discount of 10% of the above premium will be allowed if the Proposer produces the
following documents to the satisfaction of the Company
• Stress Thallium Report*
• BP report*
• Sugar (blood & urine)*
• Blood urea & creatinine*
• Self-declaration or certification that surgeries related to Heart / Brain / Cancer has /
have not been done in the past *The tests should have been taken not before 45 days
from the date of proposal.

• Premium paid by cheque or credit card is eligible for relief as provided under Section 80
D of the Income Tax Act.

Exclusions:-

• Treatments currently availed or availed during the previous 12 months from date of
proposal
• Any expenses incurred for treatment of illness/disease/sickness contracted by the
insured person during the first 30 days from the commencement date of the policy
• First Two-year exclusions : Hernia, Piles, Hydrocele, Congenital Internal disease/defect,
Sinusitis, Gall Stone/Renal Stone removal and Benign Prostrate Hypertrophy
• Two-Year Exclusions:Hysterectomy,Cataract,Joint/Knee Replacement surgery(other
than caused by an accident),Prolapsed Intervertebral Discs,Varicose Veins,Ulcers
• Naturopathy treatement
• Expenses which are purely diagnostic in nature with no positive existence of any
disease
• Expenses for treatments that are mainly cosemtic in nature
• 50% co-payment applicable for pre-existing diseases conditions

44
 • 30% co-paument applicable for all other claims.

1.Accident Care :-

An accident can put anyone’s future at risk. While an accident can be sudden, guarding
against them can be a conscious deliberate decision. STAR Health Accident Care
Insurance provides compensation in the event of death, permanent disability and
injuries suffered due to accidents

• Accidental death
• Permanent disability – total or partial – following an accident
• Temporary total disablement – the Insured Person is eligible for a weekly benefit at 1%
of Capital Sum Insured (following an accident) subject to maximum of Rs.5000/- per
week for a for 100 weeks
• Educational grant to children (1 Child – Rs.5000/-, 2 Children– Rs.10,000/-)
• Transportation expenses of mortal remains (Rs.3000/-)
• Travel expenses of one relative (Rs.1000/-)
• Cumulative Bonus of 5% accrues to the Insured Person for every claim free year,
subject to a maximum of 50%

For Individuals :-

Coverage / Risk Group Group I Group II Group III

Table I 0.45 per mille 0.60 per mille 0.80 per mille

Table II 0.80 per mille 1.30 per mille 1.75 per mille

45
 Table III 1.25 per mille 1.75 per mille 2.00 per mille

For Groups :-

% of discount on Premium
Group Size
(excluding add-on covers & service tax)

2 - 100 Persons 5%

101 - 1000 10%

1001 - 5000 12.5%

5001 - 10000 15%

> 10000 20%

• Policy can be extended to cover Medical Expenses on payment of Additional Premium

• For purpose of rating, persons proposed for insurance are classified under three risk
groups
• Risk Group I – Persons engaged primarily in administrative functions
• Risk Group II – Persons engaged in manual work other than what is specifically
provided for under Group III
• Risk Group III – Persons working in explosives industry, mines workers, high tension
electric supply, horse racing including jockeys, athletes and occupations of similar
hazards
• The Insurance may be renewed under mutual consent

46
Exclusions

• Expenses incurred on events occurring before the commencement of the cover or

otherwise outside the Period of Insurance
• Any claim in respect of Pre-existing condition
• Any claim if the insured acts against the advice of a physician
• Any claim arising out of Accidents that the Insured Person has caused intentionally or
by committing a crime or as a result of drunkenness or addiction (drugs, alcohol, etc)
• Any claim arising out of mental disorder, suicide or attempted suicide self inflicted
injuries, or sexually transmitted conditions, anxiety, etc
• Participation in Hazardous Sport/Hazardous activities
• Persons who are physically and mentally challenged unless specifically agreed and
endorsed in the policy

47
 2.Overseas Health Insurance :- Star Corporate travel Protect

Star Family Travel Protect

Star Student Travel Protect

Star individual Travel Protect

Star Corporate travel Protect :-

Globalization and business expansion have increased the need for traveling between
countries. People who travel also hold positions of high responsibility in their
organizations. While all risks cannot be avoided, STAR Health protects corporate
executives during their travel by covering them against most risks arising out of travel so
they can focus on the job at hand and accomplish their objectives.

Features

• Emergency medical expenses whilst you travel/stay abroad

• Emergency medical transportation to India
• Repatriation of mortal remains
• Any dental emergency expenses following an accident
• Compensation following accidental injuries
• Cost of loss of traveler's checked-in baggage
• Reasonable expenses incurred for obtaining new passport
• Expenses on emergency purchase of consumables due to any delay in handing over
traveller's checked in baggage by the carrier for more than 12 hours
• Delay in flight

48
 • Expenses relating to travel and accommodation incurred due to missed
departure/connection
• Hijack distress
• Any legal liability that may be fastened upon the travellers, if he/she causes any bodily
injury or property damage to any third party whilst on an insured trip
• Any travel expenses incurred in sending a substitute employee following the covered
sickness/accidental injuries of the insured employee

Eligibility

• All Corporate Executives residing in India aged between 18 and 70 years traveling
abroad on business purposes can take this insurance

Is it necessary to undergo medical tests?

Generally not required. However any proposal with adverse medical history, irrespective
of the age should be accompanied by an ECG, Fasting and Postprandial Blood Sugar,
Urine Strip Test and Cholesterol Profile reports duly certified by a cardiologist.

Plan and Trip options

The insurance is available for Travel worldwide including USA and CANADA, for sum
insured limits of USD 1,00,000, USD 2,50,000 and USD 5,00,000.

49
Star Student Travel Protect :-

Students traveling abroad are already on their own and need help if they are ever laid low by
an illness. STAR Health has a specially designed Student Travel Protect Insurance that
protects them during a crucial phase because medical treatment abroad can be prohibitively
expensive in most cases.

Medical Benefits

• Emergency medical expenses

• Emergency transportation back to India
• Repatriation of mortal remains
• Dental emergency expenses following an accident

Travel Related Benefits

• For injuries caused by accidents

• For checked in baggage

Compassionate Benefits

• Visit of one immediate family member, in case of hospitalisation

• Repatriation due to medical reasons or death of family member, resulting in interruption
in study
• Reimbursement of tuition fee for the balance period in the event of death of the sponsor

Legal Claims

• For bodily injury to third parties or damage to their property, if you happen to be the
cause
• Cost of bail bond following false arrest or wrongful detention.

50
Star Student Travel Protect:-

These days a lot more families vacation abroad. While this is the perfect opportunity for
enjoyment, there is a clear need to protect the family from risks that may be merely
inconvenience, like the loss of a passport or something more serious like a member of the
family falling ill and needing hospitalization. To be prepared for any crisis STAR Health offers
financial protection under Family Travel Protect Insurance Policy

Eligibility

• All Indian Nationals and their families - aged between 6 months and 60 years, traveling
abroad on holiday can avail this insurance
• Family consists of insured person, spouse and two dependent children (Children below
18 years)
• Additional children can be covered on payment of extra premium at 25% additional
premium per child up to a maximum of two additional children

51
 Claims Procedure

Inform the ID number for easy reference

on toll free number

In case of planned hospitalization, it should

be informed 24 hours prior to admission into
hospital

In case of emergency hospitalization,

information to be given within 24 hours after
hospitalization

In non-network hospitals, payment must be

made upfront and then reimbursement will be
effected on the submission of documents.

The Medical Officer will personally visit the

hospital for overlooking & taking proper follow
up of the claim & fills the field visit report

After checking of the full documents & field

visit report the claim settlement department
settles the claim.

KEY INTERPRETATIONS

52
• There is still much scope to explore the market as the city population is above
30,00,000 & only 2 – 5% of population is covered under any kind of health insurance
coverage.

• Various marketing activities are done to promote the company.

• Underwriting procedures are done cautiously for overall risk assessment & if found out
of the box full efforts are taken to cover that person under some different plan.

• Personal freedom is given to the Sales Managers to explore his / her talent and
generate business by his / her innovative ideas.

• Underwriting guidelines are user friendly and fitted into the software called PREMIA.

• The software sometimes becomes trouble creator due to inefficiency of either internet
connectivity or continuous power supply.

• Medical underwriting is taken care by qualified doctors at Pune due to under load of
work.

• Company possesses reminder software which generates alerts before expiry of the
policy after one year for renewal.

• There is a fixed prototype of policy underwriting due to software in which changes can
only occur through higher centers.

• This branch up till now has underwritten 420 policies in 4 months

 Therefore :- 432 / 4 = 108

 Therefore :- 108 / 26 = 4 – 5 policies / day

 Every policy takes on an average 5 – 6hrs. To be underwritten.

53
 The major time is taken by the policies requiring medical underwriting i.e.
proposers above 50 yrs. Of age. As it requires prompt action from the proposer
side after giving advanced receipt.

 Otherwise policies not requiring medical underwriting are getting underwritten

even in 1:00 – 1:30 hrs.

54
Some Suggestions for considerations:-

• Still rigorous marketing activities can be undertaken for grabing attention of the market.

• As the work load goes up unedrwritting procedures should be more cautiously done for
not accepting doubtful cases so the repudiation rate of the claims can also be reduced
thereby reducing disappointment for the policy holders.

• Medical underwriter can be appointed after the workload exceeds limit of around 12 -15
cases per day reduce the turn around time required for policy issuing.

• Non-network hospitals should be empanelled as soon as possible after confirming their

genuiness to reduce incidences of moral hazards.

• The company totally depends on web services for their underwriting, there should be
some backup if the system fails to continue the work.

• Web services and alerts can be more rigorously used for post policy services by giving
additional features as follows :-

 To gather and enlist the data base of all policy holders.

 Those having mob.no. can be provided with either weekly / every fortnight.

 Health tips, Health Alerts for social outbreaks.

 Alerts about new health care schemes and benefits.

 One can make people aware about extra benefits like tax exemptions etc.

55
 SWOT - Analysis
STRENGTHS WEAKNESSES
Stand alone health insurance company in • Upcoming private health companies
the field. offering health insurance.
Experience, expertise and support of
• Well established public sector
Big financial group.
companies.
Latest Technology and Infrastructure to
support & fasten the services. • Lack established infrastructure at
branch offices.
All the range of health products under one
roof.
Cashless service without TPA intervention
i.e. in-house claim settlement.
24 hours General Practitioner's advice and
medical counseling
24x7 in-house Call Center
Toll free telephone assistance
Complete knowledge backed website to
offer medical information, including health
tips.
Large range of premiums through different
products for every class of people.
Direct discount on premium for no claim
benefit
Welcome discount for the proposers shifting
from other company with all the
continuation benefits.
Innovative products even for chronic non-
curable diseases like diabetes, AIDS etc.
Availability of tailor made policies.

56
OPPORTUNITIES THREATS

• Ability of local people to pay for good • Established general insurance

services.
• Non-availability of any major health
insurance service provider.
• Willingness of Corporates to have a
tie-up with the company.
• Large sector of the population not
covered under health insurance & even
is unaware of the benefits.
• Increasing population going abroad
and hence availing Overseas policies.
• Inceasing number of road side
accidents & increased cost of healthcare
facilities
. sector companies.
companies having brand name.
• From the malpractices being
regularly done in this form of insurance
practices.
• Unwillingness of people to buy health
insurance thinking of wastage of
money.
• More no. Of proposals from senior
age group.who are in real need of
health care expenses.
• Resistance among people as they
have
mindset of availing policies from public

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 Key Findings during study in
New India Assurance Company

stablished by Sir Dorab Tata in 1919, New India is the first fully Indian owned insurance

company in India.

With a wide range of policies New India has become one of the largest non-life

insurance companies, not only in India, but also in the Afro-Asian region.

New India was a pioneer among the Indian Companies on various fronts, right from

insuring the first domestic airlines in 1946 to satellite insurance in 1980. The latest addition

to the list of firsts is the insurance of the INSAT-2E.

Our Mission :-

• To develop general insurance business in the best interest of the community.

• To provide financial security to individuals, trade, commerce and all other segments of

the society by offering insurance products and services of high quality at affordable cost

Our Values :-

• Highest priority to customer needs.

• High standards of public conduct.

• Transparency in operations.

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 • The company has many branch offices in Nagpur for different regions of Nagpur. The
focus of the company is more on vehicle, fire etc. type of insurances. Health
insurance though having all type of portfolios under the umbrella of the company is
still a less concerned issue for them.

• There is common underwriter for all type of insurance policies. Medical underwriting
is done on advice of the authorized diagnostic centers in the city. They don’t have in-
house claim settlement department. On their behalf third party administrators do the
job for them for which they get 6% of the premium amount.

• The team of their sales managers are also neglecting health care portfolio.

• Other private insurance companies are providing them with more benefits and much
more upgraded services.

• There is much scope for either improving or implementing the underwriting

guidelines.

• There is much difference in premium charged for the said coverage in private
companies and New India Assurance Company.

• Other benefits like no claim benefit, cumulative bonus, continuation benefits should
be more emphasized on while explaining to the proposer.

• The company has divided whole India in three zones according to the health costs of
those particular areas for reimbursements.

mediclaim policy :-

• This insurance is available to persons between the age of 18 years to 60 years.

Children between the age of 3 months to 18 years can be covered provided parents are
covered simultaneously. The persons beyond 60 years can continue their insurance
provided they are insured under Mediclaim policy with our Company without any break.

• The policy covers hospitalisation expenses for the treatment of illness/injury provided
hospitalisation is more than 24 hours. Pre-hospitalisation expenses for 30 days and post
hospitalisation expenses for 60 days are also payable.

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 • Day-care treatment - The Medical expense towards specific technologically advanced
day-care treatments / surgeries where 24 hour hospitalisation is not required.
• Ambulance Charges for shifting the insured from residence to hospital are covered up to
the limits specified in the policy.
• Ayurvedic / Homeopathic and Unani system of medicine are covered to the extent of
25% of Sum Insured provided the treatment is taken in the Government Hospital.
• Pre-existing diseases are covered only after 4 continuous and claim free renewals with
our Company.
• Pre-existing conditions like Hypertension, Diabetes, and their complications are covered
after two years of continuous insurance on payment of additional premium.

Exclusions:-

1. Diseases contracted within 30 days of insurance

2. Dental treatment except arising out of accident.
3. Debility and General Run Down Conditions.
4. Sexually transmitted diseases and HIV (AIDS)
5. Circumcision, Cosmetic surgery, Plastic surgery unless required to treat injury or illness
6. Vaccination and Inoculation
7. Pregnancy and child birth
8. War, Act of foreign enemy, ionising radiation and nuclear weapon.
9. Treatment outside India
10. Naturopathy
11. Domiciliary Treatment
12. Experimental or unproven treatment
13. All external equipments such as contact lenses, cochlear implants etc

• Following is the chart for their mediclaim policy :-

60
Sum 3 Over Over Over Over Over Over Over Over
45 50 55 60 65
insured mnths 5 yrs. 35 40
yrs. yrs. yrs. yrs. yrs.
to To 35 yrs. yrs. To 50 To 55 To 60 To 65 To 70
5yrs. yrs. To 40 To 45 yrs yrs yrs yrs yrs

yrs. yrs.

100000 1315 1250 1480 1850 2500 2810 3260 3650 4110

125000 1695 1615 1860 2280 2990 3530 4010 4510 5060

150000 2015 1920 2210 2715 3770 4240 4840 5450 6060

175000 2305 2195 2530 3100 4340 4880 5660 6360 7090

200000 2595 2470 2845 3490 4910 5660 6420 7310 8210

225000 2850 2715 3130 3830 5440 6270 7110 8260 9180

250000 3105 2955 3405 4175 5960 6880 7810 9070 10120

275000 3360 3200 3685 4520 6480 7490 8500 9840 10920

300000 3615 3445 3970 4865 6990 8090 9200 10540 11820

350000 4065 3870 4460 5470 7950 9210 10480 12030 13440

400000 4510 4295 4950 6070 8910 10340 11780 13530 15030

450000 4960 4725 5470 6735 9860 11460 13070 15040 16790

500000 5410 5150 5935 7275 10820 12580 14350 16520 18460

Special Features :-

1. Discount in premium for family cover

2. Loyalty Discount
3. Good Health Discount
4. Cumulative Bonus
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 5. Cost of Health Check up
6. Income Tax Benefit under Section 80D of IT Act.

• Claims are administered through Third Party Administrators (TPA) whose contact
particulars appear on the policy document. Insured can opt for cashless or
reimbursement facility for their claims. The proposer has the option to avail TPA
services, which is cashless or direct service by Policy issuing Office, which is on
reimbursement basis.

Personal Accident Policy:-

• This policy offers compensation in case of death or bodily injury to the insured person,
directly and solely as a result of an accident, by external, visible and violent means.
• The policy operates worldwide and is a 24 hours cover.

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 • Different coverages are available ranging from a restricted cover of Death only, to a
comprehensive cover covering death, permanent disablements and temporary total
disablements.
• Family Package cover is available to Individuals under Personal Accident Policy
whereby the proposer, spouse and dependent children can be covered under a single
policy with a 10% discount in premium.
• Group personal accident policies are also available for specified groups with a discount
in premium depending upon the size of the group.
• This policy is basically designed to offer some sort of compensation to the insured
person who suffers bodily injury solely as a result of an accident which is external,
violent and visible. Hence death or injury due to any illness or disease is not covered by
the policy.

The following types of coverage’s are offered under a Personal Accident policy:-

Table D

1. Death cover wherein 100% of the capital sum insured is payable.

Table C

1. Coverage under Table D

2. Loss of two limbs / both eyes / one limb and one eye wherein 100% of the capital sum
insured is payable.
3. Loss of one limb or one eye wherein 50% of the capital sum insured is payable.
4. Permanent Total Disablement other than above e.g. paralysis due to an accident,
wherein 100% of the capital sum insured is payable.

Table B

1. Coverage under Table C

2. Permanent Partial Disablement i.e. where a part of the body becomes permanently
disabled due to an accident, e.g. total and irrevocable loss of use of a finger due to an
accident. In such cases, a percentage of the capital sum insured as specified in the
policy is paid.
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Table A

1. Coverage under Table B

2. Temporary Total Disablement i.e. where the insured person becomes temporarily
disabled from undertaking any work as a result of an accident for e.g. fracture of legs. In
such cases, a weekly payment of 1% of the capital sum insured subject to a maximum
limit, is paid for the number of weeks or part thereof (maximum 100 weeks), during
which the insured person is totally disabled.

• The insured can claim only under any one of these sections as a result of any one
accident.
• The policy also covers expenses incurred for carriage of dead body from place of
accident to the residence subject to a limit of 2% of the capital sum insured or Rs.2,500
whichever is less. Under an Individual Personal Accident policy or Family Package
Policy, an education fund is payable for a maximum of 2 dependent school going
children, in case of death or permanent total disablement of the insured person.
• The company issue several types of personal accident policies such as :-

• Individual Personal Accident policy.

• Group Personal Accident policy.
• Passenger Flight Coupon - Covering personal accident risk whilst traveling as a
passenger on a scheduled flight.
• Gramin Personal Accident Policy - for persons residing in rural areas where benefits as
per Table C mentioned above are covered for a capital sum insured of Rs.10,000/-.
• Janata Personal Accident policy - where benefits as per Table C mentioned above are
covered for a maximum sum insured of Rs.1,00,000/-. Long Term Policies can also be
issued upto 5yrs.
• Student Safety Insurance - for schools and colleges, covering students against Personal
Accident benefits as per Table B mentioned above for a capital sum insured of
Rs.10,000/-.
• Raj Rajeshwari Mahila Kalyan Yojna - for women in the age group of 10 to 75 years.
where benefits as per Table C mentioned above are covered for a capital sum insured
for Rs.25,000/-. In case of death of an unmarried woman due to an accident,
Rs.25,000/- is payable to the nominee or legal heir. In case of a married woman, if the
64
 husband dies due to an accident, Rs.25,000/- is payable to the wife but if the wife or
insured dies no compensation is payable.
• Bhagyashree Child Welfare Policy - for girl child in the age group of 0 to 18 years.
whose parents age does not exceed 60yrs. In case of death of either or both parents
due to an accident, a sum of Rs.25,000/- is deposited in the name of the girl child with a
financial institution named in the policy which will disburse amounts as specified for the
benefit of the girl child to the living parent or to the nominated guardian. Group policies
can also be issued.

Selection of Sum Insured:-

• It is very difficult to put a value to a human life. Hence the principle of indemnity cannot
be applied in this policy. However it becomes necessary to apply some yardstick for
fixing the sum insured so that human lives are not overvalued for ulterior motives.
• Hence the capital sum insured is restricted to 72months income from gainful
employment. This means that income from property, shares etc. will not be taken into
account. For non working spouse, the sum insured is restricted to 50% of the sum
insured of earning spouse subject to a maximum of Rs.1,00,000/- and for dependent
children to 25% of the sum insured of earning parents subject to a maximum of
Rs.50,000/-. In case of Gramin Personal Accident, Student Safety, Raj Rajeshwari,
Bhagyashree policies the sum insured is fixed.
• In Individual Personal Accident policy, facility of cumulative bonus is given whereby the
capital sum insured is increased by 5% every year on claim free renewals subject to a
maximum of 50%. This cumulative bonus is available only under tables A,B & C.

In the event of an accident giving rise to a claim the following steps should be
taken:-

• In case of death claim :-

1. Assignee under the policy should immediately notify the policy issuing office.
2. Submit the claim form alongwith death certificate, post mortem report, police report and
original policy.

65
 • In case of injury claim :-

1. Notify the policy issuing office immediately.

2. Submit Police report if any.
3. Submit claim form alongwith medical certificate certifying the disablement.
4. In case medical expenses extension has been taken, then the prescription alongwith
bills are to be submitted.

Overseas Mediclaim Policy

Highlights :-

• Premium payable in Rupees and Claims settled abroad in foreign Currency.

• Policy available for frequent corporate travelers

• Medical expenses incurred by the insured persons, outside India as a direct result of
bodily injuries caused or sickness or disease contracted are covered.
66
 • Eight Plans available under the policy:

PLAN A-1) For travel to countries excluding USA & Canada for business and holiday
limited to USD 50,000.

PLAN-A-2) Same as (A-1) above except that benefits stand increased to USD 250000.

PLAN B-1) For travel worldwide including USA & Canada for business and holiday
limited to USD 1,00,000.

PLAN B-2) Same as (B-1) above except that benefits stand increased to USD 5,00,000.

PLAN C) For travel to countries excluding USA & Canada for employment and studies
limited to USD 150,000.

PLAN D) For travel worldwide including USA & Canada for employment and studies
limited to USD 150,000.

PLAN E-1) For travel worldwide including USA & Canada for corporate frequent
travelers limited to USD 1,00,000.

PLAN-E-2) Same as (E-1) above except that benefits stand increased to USD 5,00,000.

• CFT Cover is available for Executives Of Corporate clients and Partners of registered
firms annually subject to the duration of any one trip not exceeding 60 days.
• ADDITIONAL Add-on benefits:-Besides the above additional add-on benefits are
available under Business & Holiday and CFT cover(Except Plan C and Plan D)

1. Personal Accident
2. Loss of checked in Baggage
3. Delay of checked in Baggage
4. Loss of passport
5. Personal Liability

Premium: Depends on Age-band, Trip-band and Country of visits.Coverage: Initially cover

upto 180 days is provided under Business & Holiday Plan ..Extension allowed on original
policy for further period of 180 days subject to declaration of good health
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 • Age Limit: 6 months and above upto 70 years.
• Policy is to be taken prior to departure from India.
• Travelers over 60 years of age and for those traveling to USA & Canada over 40 years
the following Medical reports (from an MD Cardiologist) need to be submitted along with
the proposal form:
• ECG
• Fasting Blood Sugar or Urine Strip test
• These reports are required if the travel period exceeds 60 days and above.
• In case of travellers unable to submit the above Medical reports cover stands restricted
to USD 10,000.

Major Exclusions:-

• All pre-existing disease/illnesses are not covered (known and unknown).

• Traveling against Medical advice or for Medical treatment including routine check-up.
• First USD 100 of all claims are to be borne by the traveller.
• Please refer to Policy for further details.

SWOT - Analysis

STRENGTHS WEAKNESSES
• One of the biggest general Cashless service with TPA intervention
insurance company hence loose personal touch with the
Latest Technology and Infrastructure to consumer.
support & fasten the services. Lack of qualitative and result oriented
24 hours General Practitioner's advice leadership in health insurance.
and medical counseling Under-utilisation of all the reources like
Toll free telephone assistance manpower, technology, infrastructure

Complete knowledge backed website to etc.

offer medical information, including Unavailability of rigorous training

68
health tips.. sessions for knowledge upgradation.
Effective Pan India Presence. Unavailability of cross checking
first fully Indian owned insurance mechanism for claim settlement.
company in India.
Already established brand name.
Large amount of skilled and
experienced manpower.
Very strong financial back up.
All the range of general insurance
products under one roof.

OPPORTUNITIES THREATS

• Ability of local people to pay for • From the malpractices being

good services. regularly done in this form of
• Willingness of Corporates to have insurance practices.
a tie-up with the company. • Unwillingness of people to buy
• Large sector of the population not health insurance thinking of
covered under health insurance & wastage of money.
even is unaware of the benefits. • More no. Of proposals from
• Increasing population going senior age group.who are in real
abroad and hence availing Overseas need of health care expenses.
policies. • Fraud claims getting approved.
• Can provide all sort of general • From fastly growing private
insurance portfoiio under one roof as sector companies providing good

69
 a comprehensive service provider. services.
. .

Annexure 1
Quistionnaire for Sales Managers

Name :- ______________________________

o Why you chose to be a Star’s Sales Manager?

___________________________________________________________________________

___________________________________________________________________________

o How do you approach a prospective consumer ? for ex.

 Previous contacts or relatives

 Directly to unknown person

 Any other (Please specify)

______________________________________________________________________
___

______________________________________________________________________
____

o Which policy you stress more on & for how much of coverage?

___________________________________________________________________________

o What do you mean by pre-existing disease please define?

70
 ___________________________________________________________________________

o What is the procedure for claim please give details?

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

o What are our toll fre no. For our region ?

__________________________________________________________________________

o What are the Queries customer raises while you explain them the
proposals?

__________________________________________________________________________

__________________________________________________________________________

o What is the maximum limit of time for renewal of the policy ?

__________________________________________________________________________

o In totality how many forms of policies STAR have in it’s portfolio?

__________________________________________________________________________

__________________________________________________________________________

___________________________________________________________________________

o What do you explain to customer while explaining the policies like PED,
exclusions, benefits, renewals etc.?

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

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Please except my sincere thanks for co-operating me in my project work.

Regards

Dr. Neha Mainde

Quistionnaire for Policy Holders

1. From where you got the information about Star Health & Allied Insurance
company?

________________________________________________________________

2. How you find post policy services of the company?

________________________________________________________________

3. Have you ever claimed for your healthcare services?

________________________________________________________________

4. If yes how was the experience?

________________________________________________________________

5. Are you satisfied by the premium amount this company charge for?

________________________________________________________________

________________________________________________________________

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